by Brianna Crandall — May 31, 2013—A new report by IMS Research, now part of IHS Inc., has found that legislation could be the deciding factor if building analytics technology is to see widespread adoption. Although one of the hottest topics in the industry at the moment, building analytics has seen a relatively small scale of deployments, according to IHS. While the industry hype has been a key factor in educating potential customers about the benefits of using building analytics, it alone will not persuade organizations en masse to invest in what is a relatively new and untested technology, adds the group.
IHS says that the challenge for building analytics to gain widespread adoption is for a clear incentive to be introduced that prompts buildings owners to install the technology. Many building analytics vendors state that their solutions can save from 10% to 30% from energy bills. However, without a more accurate estimate of exactly what the savings would be, it will be difficult to convince a potential customer to invest in building analytics on a large scale, adds the company.
According to IHS’ new report, legislation could be key to creating a real incentive for companies and governments around the world to adopt building analytics.
Existing legislation in many countries requires new or renovated buildings to display an energy certificate. In 2009, New York City introduced more in-depth legislation that requires all commercial buildings over 50,000 sq. ft. to benchmark energy performance and publicly disclose the results. In Australia, a carbon tax introduced in 2012 forces polluters to pay per metric tonne of carbon released into the atmosphere. Both examples of legislation incentivize building owners to reduce energy consumption and increase energy efficiency.
As a consequence of the introduction of the carbon tax in Australia, there has been strong interest and adoption of building analytics. IHS estimates the Oceania region (Australia, New Zealand, and New Guinea) was the second largest market for building analytics in terms of revenue in 2012, after the United States.
If such legislation were introduced in other countries across the world, it could significantly boost the growth of the building analytics market, says IHS. However, the group says it is not realistic to expect a global roll-out of legislation forcing building owners to disclose energy consumption data, or taxing building owners on the pollution of carbon—at least not in the near future.
At present, IHS assumes that there will be a slow introduction of legislation over the next nine years. This forecast is presented in Figure 1, which shows the year-on-year size of the building analytics market in terms of revenue from 2012 to 2021, as well as the growth profile. This forecast takes into consideration the impact of new legislation, the global construction market, the world economy, building owner requirements, and technology trends. If legislation is passed at a faster rate than anticipated in the United States, China, or Germany, the market could see significantly faster growth than presently forecast, explains the company.
